Exporters are set to lose 500 billion Baht worth of income this year, according to the Thai National Shippers’ Council
A surge in the Thailand’s currency has left its apex bank anxious. Due to a stronger Baht, Thai exporters are estimated to lose as much as 500 billion Baht worth of income, the Bangkok Post reported.
“If the Baht still maintains its gain while responsible agencies have not come up with any measures to rein in the capital inflow, we believe Thai exporters, most of which are small and medium-sized ventures, will lose 400 to 500 billion Baht worth of income,” Visit Limlurcha, vice-chairman of the Thai National Shippers’ Council, told the Bangkok Post.
The Baht averaged 32.48 to the US dollar in 2018 and is now moving in a range of 30.50 to 30.60.
According to Visit Limlurcha, this is equivalent to a loss of two Baht per one dollar in foreign exchange.
In an attempt to curb the surge of the Baht, Bank of Thailand plans to scale back the auction size of its short-term bonds.
The supply of short-term bonds, including three months, six month and one-year bonds will be reduced by the central bank. While the size of three-month and six-month bonds will be cut by 5 billion Baht per week, the supply of one-year bonds will see a 10 billion Baht cut.
The Thai government’s mega-projects such as the eastern economic corridor and high-speed railway projects and the country’s strong economic fundamentals have made Thailand a safe haven in the eyes of foreign investors.
These factors contribute heavily towards the surge in the nation’s currency. Thailand’s tourism department is also facing the heat of a stronger Baht.
Tourism Authority of Thailand (TAT) has cut its estimate for tourism revenue growth for 2019 from 10 percent to 9.5 percent with the strong baht being one of the major reasons.